MAPUTO, May 29 Africa is "taking off" with
strong, steady growth but poverty is unacceptably high so that
governments need to build infrastructure and institutions and
educate people to share the benefits more widely, the IMF's head
said on Thursday.

Sub-Saharan Africa is expected to grow by around 5.5 percent
this year - well above the global average - with some of its
poorest countries expanding by closer to 7 percent, Christine
Lagarde, International Monetary Fund (IMF) managing director,
told an IMF conference in the Mozambican capital Maputo.

But the IMF chief said although the region had become a
growing investment destination for both advanced and emerging
economies, with a record $80 billion of inflows expected this
year, the economic benefits of the growth surge had yet to be
widely distributed across the region's population.

"Poverty remains stuck at unacceptably high levels - still
afflicting about 45 percent of the region's households,"
Lagarde told the meeting of African finance ministers and
development experts.

Despite forecasts of continuing strong expansion for the
region, its positive outlook has been darkened this year with
flare-ups of conflict, insurgency and violence. This has ranged
from civil war in the world's newest state, South Sudan, an
insurgency waged by radical Islamist Boko Haram group in
Africa's largest economy Nigeria and attacks by Islamist
militants hurting tourism and business in Kenya.

As African countries tap new sources of funds through
natural resource discoveries and international dollar bonds,
questions have also arisen about how governments are managing
this money in fast-growing economies like Ghana and Zambia.

Lagarde said that with the international recovery still
looking weak and uneven, Africa's positive outlook also faced
risks from slower growth in the world's advanced economies and
in emerging markets, which are the region's main trade partners.

Other risks included lower prices for some commodities,
tighter external financial conditions and market volatility.

The IMF head recommended three priorities to ensure the
region's growth can be wide, inclusive and sustained: "Build
infrastructure, build institutions, and build people."

INFRASTRUCTURE, JOBS

Lagarde said Africa still had big infrastructure gaps, which
represented huge costs to businesses and to people.

She cited as an example the fact that over the past three
decades, per capita output of electricity in Sub-Saharan Africa
remained virtually flat. Only 16 percent of all roads were
paved, compared with 58 percent in South Asia. The investment
needs to address this in the region were estimated at about $93
billion annually, she said.

The IMF chief said Africa also needed to improve governance,
transparency and create sound economic frameworks for growth -
she called this "building institutions."

This would ensure that revenues and benefits from the
continent's mineral riches - Africa has more than 30 percent of
the world's mineral reserves - could be better captured for
national budgets and generating more jobs.

Lagarde said Africa needed to "build people" to reap the
dividends of its rapid population growth. She cited estimates
that a one percentage point increase in the working age
population could boost GDP growth by half a percentage point.

"For this to happen, however, 'good' jobs need to be created
in the private sector. Today, only one in five people in Africa
finds work in the formal sector," Lagarde said. "This must
change. With wider access to quality education, healthcare and
infrastructure services, it can change."

Technology could extend access to financial services to
millions, and this was already happening in several countries,
such as Kenya.

"Africa Rising will benefit the lives of people on the
continent. Beyond that, Africa Rising will benefit the world,"
Lagarde said.
(Editing by Jane Merriman)

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